A monthly cashflow budget helps you identify potential shortfalls in cash over the year that may impact on your ability to carry out normal or planned activities. It also informs how much overdraft (working capital) you may need to keep your business functioning over shortfall months. You can compare your actual expenditure with your monthly expenditure to monitor your cashflow position and take corrective action where necessary, reallocating money across expenditure items.
Budgeting for your dairy farm is all about planning your income and expenses. Remember to account for every source of income, such as milk and stock sales, and all outgoings, like farm expenses, loan repayments, and tax.
A cash management system, or cashbook, is vital for monitoring all payments and receipts, keeping track of compliance requirements, and managing day-to-day finances effectively.
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